Bulk pricing, fundamentally, involves offering a reduced per-unit cost when customers purchase a larger quantity of a product. For instance, a single widget might cost $10, but purchasing a dozen could reduce the individual widget price to $8. This practice incentivizes larger orders and can significantly impact overall revenue.
Implementing a tiered pricing system yields several advantages. It can stimulate sales volume, reduce inventory holding costs, and enhance customer loyalty. Historically, bulk discounts have been a cornerstone of business-to-business (B2B) transactions, allowing suppliers to move larger volumes of stock efficiently while providing cost savings to buyers.